Flexitricity to change how electricity is traded and take on the Big Six

Britain’s leading demand response aggregator is set to transform how electricity is traded in the UK after it announced plans to become an energy supplier – and shake up how the National Grid is balanced.

The Balancing Mechanism (BM) is the real-time flexible electricity market National Grid uses to balance supply and demand. Becoming a supplier of electricity and gas for businesses next year will allow the Edinburgh-based company to take its customers right into National Grid’s Balancing Mechanism, currently the preserve of traditional energy suppliers like the Big Six.

Prices in the BM can reach £2,500/MWh, compared to around £50/MW in wholesale markets. The market is used around 3,000 times per day at a cost of £350million per year – a cost which is passed on to the bill payers.

By taking the flexibility of industrial, commercial and public-sector energy users right into the BM, Flexitricity says it can give its customers a slice of this premium market, while cutting the cost for National Grid and all energy users.

Flexitricity’s founder and Chief Strategy Officer, Dr Alastair Martin, said: “We’re already the experts in monetising flexibility in energy consumption and generation. We work with over 50 organisations across around 20 sectors, and we’re going to keep doing that, whoever they buy their electricity and gas from.

“But there’s a niche customer base out there who could do more if they had the opportunity. That’s what this is about. We’re cracking open the most important market in flexible energy for those who can both earn from it and contribute to it.”

Initially the new service will be targeted at businesses and public sector organisations, and is particularly suited towards those that operate community energy schemes, combined heat and power (CHP) generators and cold stores, as well as battery developers.

Flexitricity currently works with a wide range of industrial and commercial customers, operating electricity balancing services from its 24-hour control room. Industry rules mean these are currently separate from the BM. By becoming an energy supplier, Flexitricity plans to join these activities together.

Ron Ramage, Flexitricity’s CEO, said: “This move represents a significant investment for our business and will create 12 new high-value jobs for Edinburgh.”

“The new energy trading proposition is a natural evolution of Flexitricity’s business model, taking advantage of our technical capability to exploit a gap in the market we believe represents real value for our customers. We will be working with three expert organisations to help create and deliver our energy supply offering: ENSEK, Quorum and Jules Energy. All three are widely-respected names in the industry with unbeatable track records.

“This is the first time anything like this has been done in the Balancing Market and we think it will be transformational – we are unlocking value for our customers as well as for bill-payers across the country by making our electricity system more efficient.”

Flexitricity say the new service will be formally launched in mid-2018.

Flexitricity partners with businesses throughout the UK to provide reserve electricity to National Grid.

The word “Flexitricity” means “Flexible Electricity”. The company looks for flexibility in electricity consumption and generation, creating revenue for energy users and generators using the flexibility they find.

Based in Edinburgh, the company introduced the concept of aggregated load management and flexible generation.

Flexitricity has been aggregating electricity production and consumption of energy-intensive industrial, commercial, and public sector companies since 2004. Flexitricity offers these electricity volumes to the transmission and distribution system operators as positive or negative reserves for ancillary services. In Europe, Great Britain is the most developed market for demand response services. Flexitricity pioneered this market sector and continues to lead it in terms of volume and technical capability.

Flexitricity is part of the Alpiq Group, a leading Swiss electricity and energy service provider. In the area of demand response services and peak load management, Alpiq provides flexibility services to its customers. As a technology corporation, Alpiq develops new products and services in the area of digitalisation and is already successfully working in this growth market.

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